Who Pays For Car Damage In a No-Fault State?

WRITTEN BY: Julia Matseikovich


Knowing who’s at fault can be complicated when more than one vehicle is involved in a car accident. But anytime you have a multiple-vehicle wreck, and need to file an insurance claim, establishing who’s at fault is essential.

Every state within the country has its own laws to help sort out insurance claims in the aftermath of an accident. And just because you may reside in a no-fault state doesn’t necessarily mean that no one is at fault in the accident, as many drivers believe. Below we’ll dive further into who pays for car damage if residing in a no-fault state and what you can expect from your auto insurance company. 

No-fault insurance – what is it?

Most states within the United States require a minimum amount of car insurance to remain legally on the road. The minimum required insurance includes bodily injury and property damage liability coverage. When you have a no-fault insurance policy, you must add personal injury protection (PIP) coverage. 

If you’re in an accident in an at-fault state, you will submit your insurance claim to the at-fault party’s insurance company to help cover your medical expenses. If you’re in an accident while in a no-fault state, you will file your claim with your insurance company, no matter which party is at fault.

In addition to covering medical expenses incurred from the car accident, PIP coverage also covers any lost wages that may arise due to the loss of income due to an injury caused by the auto accident. 

Sometimes determining a party’s negligence is difficult. When this happens, insurance companies usually prove negligence on behalf of the driver.

When you’re found to be half the party who’s negligent, you’ll likely see an increase in your insurance rates, and your payout could be less than expected with your claim. If you have an at-fault policy, you can claim additional damages for pain and suffering, but this can’t be done with a no-fault policy. 

Why carry a no-fault insurance policy?

No-fault policies can save you both money, as well as time. These policies help alleviate extra headaches, such as lawsuits that could arise after a car accident. 

If you’re involved in a wreck in a no-fault state, your PIP coverage pays out immediately, no matter who’s at fault. PIP coverage is also helpful since it pays out so quickly. The injured parties can access medical care right away, even before determining who’s at fault.

What are no-fault states?

Every state has its own state laws regarding handling insurance claims following car accidents. When you’re in an accident in a no-fault state, every driver’s PIP coverage will pay towards lost wages and medical expenses following the car accident, no matter who is at fault. 

Drivers must carry a minimum amount of insurance: bodily injury liability and personal injury protection coverage. Just because your insurance policy will kick in and pay the claim right away doesn’t mean that the at-fault party won’t be responsible for the damages incurred to your vehicle if they caused the accident.  

At-fault insurance versus no-fault insurance

In at-fault states, the negligent driver’s insurer will pay the property damage costs and the injured driver’s medical expenses. Insurance claims generally take far longer to process in an at-fault state because the insurance companies must first determine fault before paying on a claim. No-fault insurance pays out much quicker because both insurers process these claims immediately. 

Which states are no-fault insurance states?

The United States is comprised of 38 at-fault states and 12 no-fault states. The following states are considered no-fault:

  • Florida: Drivers must carry a minimum of $10,000 in property damage liability (PDL) and $10,000 in PIP.
  • Hawaii: Drivers must carry a minimum of $20,000/$40,000 in bodily injury liability (BDL), $10,000 in property damage liability, and $10,000 in PIP.
  • Kansas: Drivers must carry a minimum of $25,000/$50,000 in bodily injury liability, $25,000 in property damage liability, $25,000/$50,000 in uninsured/underinsured motorist coverage (UM/UIM), and $4,500 in PIP.
  • Kentucky: Drivers must carry a minimum of $25,000/$50,000 in BIL, $25,000 in PDL, and $10,000 in PIP.
  • Massachusetts: Drivers must carry a minimum of $20,000/$40,000 in BIL, $5,000 in PDL, $20,000/$40,000 in UM/UIM, and $8,000 in PIP.
  • Michigan: $50,000/$100,000 BIL, $10,000 in PDL outside of Michigan, $1 million in PDL in Michigan, and $50,000 – $250,000 in PIP.
  • Minnesota: Drivers must carry a minimum of $30,000/$60,000 in BIL, $10,000 in PDL, $25,000/$50,000 in UM/UIM, and $40,000 in PIP.
  • New Jersey: Drivers must carry a minimum of $5,000 in PDL and $15,000 in PIP coverage. 
  • New York: Drivers must carry a minimum of $25,000/$50,000 in BIL, $10,000 PDL, $25,000/$50,000 in UM/UIM, and $50,000 in PIP.
  • North Dakota: Drivers must carry a minimum of $25,000/$50,000 in BIL, $25,000 in PDL, $25,000/$50,000 in UM/UIM, and $30,000 in PIP. 

Choice no-fault states

Three out of twelve no-fault states are considered choice no-fault states. These states allow drivers the option to choose between no-fault and at-fault coverages. These choice no-fault states include Kentucky, Pennsylvania, and New Jersey.

Add-on no-fault states

Ten states within the U.S. allow drivers to add PIP coverage to their insurance policies. These are referred to as add-on no-fault states. These states include:


How does insurance work when it’s not your fault?

In most cases, the driver at fault’s insurance company will pay for the vehicle damages caused by the car accident. If the negligent party doesn’t have adequate liability coverage to cover the cost of damages to your car, your collision coverage will cover the remaining amount. 

How does no-fault insurance work in Hawaii?

Hawaii is considered a no-fault insurance state. Your insurance company will cover the medical bills up to your PIP limit. 

Is NJ a no-fault state for car damage?

New Jersey is a no-fault insurance state. New Jersey drivers will visit their insurance company following a car accident.

What does a no-fault state mean in Minnesota?

Minnesota is a no-fault insurance state. Drivers in Minnesota will first seek compensation through their own insurance company. 

Who pays for car damage in a no-fault state Kentucky?

Kentucky is considered a choice no-fault insurance state. This means that drivers in Kentucky need to carry PIP insurance coverage and will file a claim with their auto insurance company first. However, Kentucky allows drivers to opt out by special request.

How does car insurance work when you are not at fault in California?

In California, the driver who isn’t at fault will file with their insurer. Once the claim is filed, the other driver’s insurance will pay the claim.

Who pays for car damage in Florida?

Florida is a no-fault state. Drivers in Florida must carry PIP coverage equating up to $10,000 in coverage. 

Does no-fault state insurance mean you don’t have to pay for car damage?

No-fault state insurance means both parties will turn to their car insurance companies to file claims. This goes for drivers who aren’t at fault as well. The no-fault driver’s insurance will pay the medical expenses associated with the car accident. The at-fault driver’s insurer will cover the damages to the motor vehicles.